Despite the high local passenger traffic in Nigeria’s aviation sector, the country failed to maximise such opportunity in growing very strong airlines, until recently when government decided to make the air transport sector more viable, writes Chinedu Eze
In the past 63 years of Nigeria’s Independence, there were not much to cheer, but in the last one year, hope started growing in the horizon as the current administration under President Bola Ahmed Tinubu is beginning to address the key knotty issues that retarded the industry since Nigeria gained Independence in 1960.
In view of the new development taking place in the aviation industry in the last one year, industry stakeholders have highlighted key factors in Nigeria’s aviation industry that can determine its growth to include: policies that drive the industry, effective implementation of such policies, strong airlines, high passenger growth, efficient regulation, modern airports, viability of operators and contribution to nation’s GDP.
In the area of policies, the current Minister of Aviation and Aerospace Development, Festus Keyamo, has realised that without the right policies in place the industry would still oscillate in the realm of mediocrity. So, he is putting things in place to grow strong airlines, to ensure that the airlines operate safely and also to ensure that the issues that hindered their growth in the past were eliminated.
His efforts so far have reawakened enthusiasm and high expectations in the industry. Airlines are feeling that they have got a working partner. But skepticism remains because the major challenge the industry faces is that every Minister that comes has his or her own ideas. No one knows how long positive policies made to drive the industry can last. They may not outlive the Minister that instituted them, as it has happened in the past.
So, the industry is embroiled in preemptory, knee-jack policies that serve the narrow interest of the Ministers in the past, but what the sector needs is long-term policies that can guarantee positive growth and consistency.
In the area of infrastructure, Keyamo has promised concession of major airports under the management of the Federal Airports Authority of Nigeria (FAAN), private sector driven with apparent transparent process. This may sound like a sing-song because the immediate past Minister, Hadi Sirika, played his lyre on that promise but it never materialised. So, it is with subdued hope that industry stakeholders look forward to the fulfillment of his promises. However, with what he has achieved so far, and his overall attitude, it is an endearing promise with high expectations.
The Past
Before the Tinubu administration, the priority of the government was creating opportunity for foreign airlines. In fact, some Ministers would say that Nigerian airlines did not have capacity, and there was no intentioned effort to help the airlines to grow capacity. Rather, foreign airlines were being begged to start some routes in Nigeria. But the current administration has departed from that past and the Aviation Minister is working with other Ministers to have strong aviation policies that can drive the industry to the future.
This is why earlier in the year, the Minister did everything possible to see that Nigerian major carrier, Air Peace, started flights to London and so far, it has been a successful story, going by the feedback from passengers who travelled with the airline’s flight to London. Emirates Airlines resumed flight service to Nigeria on Tuesday. Before its flight, the Minister travelled to United Arab Emirates (UAE), where he, accompanied by technical officials from the aviation agencies met with UAE aviation authorities to review the Bilateral Air Service Agreement (BASA) to ensure that the interest of Nigerian airlines is protected. In the principle of reciprocity, the BASA allows Nigerian carrier to operate to Dubai, as Emirates is operating to Nigeria.
The Minister has also paved way for Nigerian carriers to tap into the Cape Town Convention (CTC) by reviving the signatory Nigeria had and abiding by the rules to make it easy for airlines to pay less for aircraft leasing and to also engage in dry lease. In addition, the new arrangement initiated by the Minister will prompt lessors to review insurance premium paid by Nigerian carriers and eventually remove the designation, high country risk on Nigeria.
Better Service to Air Travellers
In order to serve air travellers better, NCAA has established consumer protection portal. The establishment marked a significant step towards creating platform for interface between airlines, NCAA and air travellers in accordance with international practices and standards.
The portal offers a comprehensive platform where passengers can lodge complaints, access real-time data on airline performance, and monitor punctuality and on-time operations of airlines.
NCAA said the portal would also serve as a valuable resource for the aviation industry, offering data and tools for research and development, and contributing to informed decision-making that can ultimately improve service delivery.
The Minister said the easiest way government could develop the aviation industry is to review and also introduce pro investment policies that would attract private investors, eliminate the policies, which are inimical to growth, and promote private enterprise.
In other words, there are hitherto stringent and conservative policies, which are disincentives to investment by the private sector. Such policies that will hinder their ability to make profit, encourage prolonged, boring bureaucracies and such other policies that can erode the confidence of investors in putting their money in the sector should be done away with. Then opaque actions of government and its agencies should be looked into. The Minister believes that when these seeming obstacles are removed, the private sector would be willing to invest in the industry.
Airport Development
According to Keyamo, the federal government has the plan to build aerotropolis at the airports and establish hubs but this can only be done when private investors see attraction in what government can offer, which is reliability, policy consistency and other incentives, including transparency in the processes.
“We are saying that we are going to build aerotropolis. We are going to make them proper hubs. However, we cannot do so without private investment. And so we are going out to attract more investors, and we are advertising very soon for concessions. However, we want to carry the unions along. This is my major focus in this drive. I don’t want to do it like previous ones, that there were complaints, either from within or outside. There was resistance by the unions. Resistance from other people, and resistance from even the co-bidders, that the processes were not transparent enough. The first thing about the safety of jobs of those in the union, and one of the first conditions we will give whoever wants to do concessions with us, is that they must carry our liabilities along – the workers. Make sure their jobs are safe, then we can start talking. If the workers are not safe, we can’t start talking. It is as simple as that,” the minister said.
Stakeholders Review
THISDAY spoke to industry stakeholders on what the federal government must do to propel the industry. The Executive Secretary of Aviation Round Table (ART), Olu Ohunayo, said that government should do everything possible to ensure that people travel by air. Currently, the number of Nigerians who travel by air is diminishing due to high airfares occasioned by many factors, including paucity of aircraft, high foreign exchange and high cost of aviation fuel.
“We must all know that without the passengers there are no airlines. Without the airlines there are no airports or agencies. And without the airport and agencies there is no aviation. And without aviation there is no economy.And without economy then there is no government. So we must look at that chain and see how we can work this chain back to the beginning to ensure we have passengers to fly. And for passengers to fly is not the function of the aviation industry alone.
“There is purchasing power and deliberate increase in the middle class population who are willing and eager to fly, officially, on holidays, on tourism, visiting family and friends. But for us to capture this group, sincerely, I think we need to tweak some of our policies.First and foremost, I am not a fan of concessioning the airports. Rather, I would want to see the involvement of a reputable airport management company to come in and take over FAAN over a period, maybe 10 years, do the necessary and be prepared as a corporate organization that will run as a behemoth.A behemoth that will be beneficial to the government, the owners and the people of Nigeria. And will also start investing outside Nigeria by capturing airports from neighbouring West African states before going further. We have seen the South African airport company.That is what I want to see, not just having different owners of concession terminals. Yes, if an organization says it has three out of 22 are profitable, that is about 13 per cent.
“Yes, that organization is among the top 10 highest revenue generator for the government. There is something wrong with that mathematics. It is the same industry that we are complaining about. We have a regulator being among the top 10 revenue generators for the government. So how can this organization owned by the government be generating money, big money even when only 30% of the organization is functioning. It shows someone is paying for this.Someone is paying for this irrationally. It is the operators and the passengers. And that is why IATA said our airport is the most expensive in Africa,” Ohunayo said.
He also suggested that age limit of aircraft that are allowed to operate in the country should be reviewed because the challenge is not the age of aircraft but the ability to maintain them. Ohunayo also spoke about providing a conducive environment for foreign direct investment, regretting that countries that have incentive and friendly policies are attracting investors to invest in their countries around Nigeria.
The Managing Director, Flight and Logistics Solutions Limited, Amos Akpan, who spoke to THISDAY in a telephone interview, urged the government it should make sure it implemented the programmeit initiated until the impact becomes noticeable in the operators businesses and by the air traveling public.
“If you say you are establishing a hub. Let’s see you increase the number of avio bridges, extend the aprons, create serviceable fuel hydrants, create transit facilities, make operations into and out from your hub easier for operators. Make flying through your hub attractive to passengers. Think through and start putting it into action.If you have said zero customs duty on aircraft spare parts, make it possible for a Nigerian operator to pick his aircraft spare parts on arrival of international flights. This will enable the operator fix the snag on his aircraft on time. This will reduce the ground time of snagged aircraft. This will make ground time due snag predictable. This will make the operator’s schedule reliable.
Foreign Airlines will continue to dominate our international routes because Nigerian airlines are yet to develop the capacity required on our international routes. Air Peace is trying but it will take time and money to get to match the mega carriers,” he said.
Akpan also said the government should be intentional by making sure each programme or project it embarks on brings desired results.
“We have been listing the challenges in the industry with recommended solutions to every government and committee. Whatever solution they have picked to apply let them see to its logical conclusion. We need to move forward from our current position.We complain about the effects hamartan dust haze year-in, year-out and we haven’t found solutions to its limitations on flights during that period.
We complain about the existing MROs in Nigeria not having capacity to contain the maintenance program of aircraft used by Nigerian airlines. Government should dialogue with them to enable them expand and increase capacity,” Akpan recommended.
In his recommendation on how to improve the industry for the years ahead, the aviation security expert and the CEO of Centurion Aviation Security and Safety Consult, Group Captain John Ojikutu, said, “I have said it repeatedly that we must have at least two flag carriers, one regional and continental and the other intercontinental. Restrict the foreign airlines to Lagos or Abuja and not anymore to Lagos and Abuja but each can have additional airport from alternative geographical location to the airport of their first choice. All the Airports should be given out for concessions without exception but only the non-Aeronautical commercial services or businesses should go for the concessions. Government must retain its obligations to the international community to comply with the international standards and practices, to oversight and enforce the National Safety and Security Regulations, sustain periodic audits for the aviation operators and the services providers, and be implementing the safety recommendations from the Accountant Reports.”
The federal government should find ways to end policy summersault. It should find effective ways to ensure that policies enacted in the past are sustained, if they are good for the industry.
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